The government proposes to offload a 16 per cent stake in Bharat Heavy Electricals Ltd and around 20 per cent in Shipping Corporation of India through public offers.

In addition, the Centre is planning to use the initial public offers of Power Grid Corporation and Power Finance Corporation to sell its 5 per cent stake in the two companies during the current financial year.

A government official told Business Standard that the Centre also intended to sell its 5 per cent stake in National Hydroelectric Power Corporation at the time of its IPO some time in the next financial year.

The finance ministry is pushing for selling the government's residual 18 per cent stake in Maruti Udyog during the current financial year though Heavy Industry Minister Santosh Mohan Deb wants a rethink on the issue.

Based on today's market prices, the government can expect to raise over Rs 3,200 crore (Rs 32 billion) from the SCI and Bhel public offers. The Bhel scrip closed at Rs 642.05 on the Bombay Stock Exchange, while the SCI scrip closed at Rs 160.10.

At today's prices, the sale of a 16 per cent stake in Bhel could fetch the government over Rs 2,300 crore (Rs 23 billion) and the sale of a 20 per cent stake in SCI (56.5 million shares) would fetch it over Rs 900 crore (Rs 9 billion).

Officials said the government was on course to achieve its budgeted sell-off target of Rs 4,000 crore (Rs 40 billion) for 2004-05.

It mopped up around Rs 2,700 crore (Rs 27 billion) through the sale of its 5.2 per cent stake in National Thermal Power Corporation, which closed its issue earlier this month. NTPC shares are to be listed on the bourses next month.

At present, the government holds 67 per cent in Bhel and 80.12 per cent in SCI. A proposal to sell the stakes in Bhel and SCI are pending with the heavy industry ministry and the department of shipping, respectively.

The power ministry has agreed to the proposal to offload stakes in PFC, Power Grid and NHPC. The proposal is to be taken up by the Cabinet Committee on Economic Affairs shortly.

A proposal for offloading shares in other public sector companies through public offers is also expected to be taken up by the Cabinet shortly. The policy will lay down the United Progressive Alliance government's divestment policy.

During the last financial year, the government had divested holdings in ONGC, Maruti, IBP Ltd, Dredging Corporation and CMC. The holdings in Maruti and ONGC had been sold through public offers.